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Sunday 27 September 2009
Mainland investors still keen to bet on equities
Despite uncertainty about the direction of the mainland stock market, many investors say they are inclined to withdraw their bank savings for investment, a central bank survey shows.
Despite uncertainty about the direction of the mainland stock market, many investors say they are inclined to withdraw their bank savings for investment, a central bank survey shows.
According to a quarterly survey released by the People’s Bank of China yesterday, 41.6 per cent of the respondents said they would invest rather than save, 3.7 percentage points higher than a quarter ago.
The central bank did not release data about the other responses.
The PBOC said it interviewed households in the mainland’s 50 cities.
The findings suggest many people still think the equity market will rise further, following a 55.9 per cent rally this year. Increasingly, investors have been wary of a liquidity drain as Beijing fine-tunes the loose monetary policy.
The Shanghai Composite Index shot up as much as 90.7 per cent from the start of the year, buoyed by an influx of speculative capital, hitting a high of 3,471.442 points on August 4.
Almost 1.2 trillion yuan (HK$1.36 trillion) of banking loans were illegally invested in stocks as corporate investors chased short-term gains by taking advantage of easy credit, according to Wei Jianing, a researcher at the State Council’s Development Research Centre.
But in July, worried about a bubble, the central bank started to rein in massive loans, dealing a blow to the equity market, which retreated 18.2 per cent from its high to 2,838.842 points yesterday.
“The survey reflected the trend that residents are still willing to invest,” said Haitong Securities analyst Zhang Qi. “But an increasing fund inflow may not be enough to offset the growing number of new shares.”
The China Securities Regulatory Commission resumed initial public offerings in June after a nine-month hiatus. All of the flotation stocks have been heavily oversubscribed and they have brought significant first-day gains when they debuted on the Shanghai and Shenzhen stock exchanges.
Among them, China State Construction Engineering Corp, the mainland’s largest homebuilder, raised 50.16 billion yuan by selling 12 billion A shares in late July, making it the world’s biggest listing this year.
The CSRC also took a significant step last week, allowing 10 small companies due to list on the Nasdaq-like second board to start the flotation process.
The start-up firms offered their shares to the general public yesterday, expecting to raise a combined three billion yuan.
Many investors now believe the market will soon re-enter the bullish territory of 2007 when the key indicator hit a record high of 6,092.057 points.
1 comment:
Mainland investors still keen to bet on equities
Daniel Ren in Shanghai
26 September 2009
Despite uncertainty about the direction of the mainland stock market, many investors say they are inclined to withdraw their bank savings for investment, a central bank survey shows.
According to a quarterly survey released by the People’s Bank of China yesterday, 41.6 per cent of the respondents said they would invest rather than save, 3.7 percentage points higher than a quarter ago.
The central bank did not release data about the other responses.
The PBOC said it interviewed households in the mainland’s 50 cities.
The findings suggest many people still think the equity market will rise further, following a 55.9 per cent rally this year. Increasingly, investors have been wary of a liquidity drain as Beijing fine-tunes the loose monetary policy.
The Shanghai Composite Index shot up as much as 90.7 per cent from the start of the year, buoyed by an influx of speculative capital, hitting a high of 3,471.442 points on August 4.
Almost 1.2 trillion yuan (HK$1.36 trillion) of banking loans were illegally invested in stocks as corporate investors chased short-term gains by taking advantage of easy credit, according to Wei Jianing, a researcher at the State Council’s Development Research Centre.
But in July, worried about a bubble, the central bank started to rein in massive loans, dealing a blow to the equity market, which retreated 18.2 per cent from its high to 2,838.842 points yesterday.
“The survey reflected the trend that residents are still willing to invest,” said Haitong Securities analyst Zhang Qi. “But an increasing fund inflow may not be enough to offset the growing number of new shares.”
The China Securities Regulatory Commission resumed initial public offerings in June after a nine-month hiatus. All of the flotation stocks have been heavily oversubscribed and they have brought significant first-day gains when they debuted on the Shanghai and Shenzhen stock exchanges.
Among them, China State Construction Engineering Corp, the mainland’s largest homebuilder, raised 50.16 billion yuan by selling 12 billion A shares in late July, making it the world’s biggest listing this year.
The CSRC also took a significant step last week, allowing 10 small companies due to list on the Nasdaq-like second board to start the flotation process.
The start-up firms offered their shares to the general public yesterday, expecting to raise a combined three billion yuan.
Many investors now believe the market will soon re-enter the bullish territory of 2007 when the key indicator hit a record high of 6,092.057 points.
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